When a creditor is seeking payments for a debt that is in arrears, it may choose to file a lawsuit against the debtor who owes it money. When this happens, if the creditor wins, he may choose to petition the judge to take actions that allow him to seize the money owed him by force. This can include the garnishment of the individual's wages or the freezing and seizure of his bank account. Bank account seizure can be contested in several ways.
Garnishment
The term "garnishment" is generally applied to any forceful legal seizure of an individual's assets to incur repayment of a debt. When a bank account is garnished, this can be referred to as seizure or freezing, as the individual who holds the account no longer has access to it. A bank account can only be frozen with the permission of a judge. The exact process of seizure varies by state, but defenses against it are relatively similar.
Get An Attorney
If your bank accounts are being seized, then you should consult an attorney immediately if you can afford one. If you cannot afford a private attorney, you may wish to consider consulting a legal aid office. This attorney will be best equipped to determine your options, as he will be familiar with the relevant debt collection laws in your state. Pick an attorney that specializes in debt or personal bankruptcy law.
Appeal
There are several reasons that you may be able to appeal the seizure of your account. Many jurisdictions allow account holders to have a special hearing after their accounts have been seized. In some cases, people with low incomes are protected from having their accounts seized. In addition, a person may be allowed to claim that certain funds are not eligible for seizure by private creditors, as federal law deems them exempt.
Exempt Funds
There are a number of different types of funds that cannot be seized by creditors. While most laws related to bank account seizure and debt collection are made at the local level, federal law prevents several types of assets, including most federal benefits, from being seized by private creditors. If you point out to your bank or to a judge that a portion of your bank funds are ineligible for seizure, the bank may unfreeze them.
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